Norway’s Hoegh LNG will stop paying dividends to investors as part of a move in reducing costs due to the uncertain environment caused by the Covid-19 pandemic.
Hoegh’s board has decided to suspend dividends, bonus scheme for executive management and onshore personnel until further notice, the floating LNG player said on Monday.
The cost-saving plan will focus on overhead and vessel operating costs.
Hoegh is targeting $9 to $11 million in savings for 2020, compared with the company’s original plans and budgets for this year.
The estimated effect includes the elimination of bonus and other costs, as well as deferring costs, scheduled maintenance and projects to subsequent periods, it said.
Hoegh said about one-third of the estimated effect relates to costs which it will move to 2021.
In addition, chairman of Hoegh LNG’s board Morten W. Høegh and director Leif O. Høegh have waived their board remuneration for 2019, payable in 2020.
Morten W. Høegh also waived the board remuneration payable by Höegh LNG Partners.
“The impact of the Covid-19 crisis on the company’s operations and business outlook will be continuously monitored and evaluated, and further cost reduction and liquidity preservation measures could be implemented at future dates,” Hoegh LNG said.
New credit facility
Hoegh LNG has executed a new revolving credit facility worth up to $80 million.
The company announced this facility provided by three of the company’s relationship banks in January this year.
Hoegh will use $65 million of the facility to repay the company’s HLNG02 bond loan which matures in June 2020.
The Norwegian company will use the remaining funds for general corporate purposes.